Triple Net just means the renter pays Taxes, Insurance and Maintenance. So the owner would just get the cash.
Ok, same as a lease purchase.
Again I will ask you these questions minus the one that was answered. No response will lead everyone to believe that in fact, propertymanager is correct and these are shills.
Joshua,
Please explain the difference between the land contracts you do and the lease options I do. From what I understand the primary difference is what you are doing is not recorded. I am trying to figure out how you have not had 1 buyer default to date when both from personal experience and friends who do the same, an overwhelming number of people default. Upwards of 75%. Personally, I have no problems when a buyer defaults because my lease options are set up to account for this.
Also, a 22.5% cash on cash return would be outstanding compared to the stock market but increases significantly for those who put LESS down.
There are MANY scammers out there, especially in real estate, and I think you can agree with that. Since we have opened this for discussion I think it is important to clear this up now. If you get a clean bill of health here I can assure you that you will have many people come your way.
Thanks!
Hey Hooch,
A lease option is just that, a lease with an option to buy. This is a typical rent to own strategy.
A land contract is a contract used in a sale of real property where the seller retains title to the property until all installments have been paid. (so its not a tenant but a buyer that owns the property)
For the last 9 years we have designed profitable real estate strategies for distressed properties. We kicked the SEG REO Program off September of last year. So since that time we have not had 1 default.
I have had defaults on other lease options and land contracts but involving different programs or strategies. With this program if someone defaults they forfeit their principal payments and revert to a month to month tenancy at which point they can be evicted. The only exception to this is in farm states like OH and KS that require a foreclosure if the land contract buyer has paid down more than 20% of the principal balance.
You are correct about the silver lining of a default. In that case the process can start over and a new profit is locked in with a new land contract buyer.
Our clients have been loving the returns and the fact they do not have a bank loan on the property. This means no mortgage payment during vacancies and the cash flow is $450 - $650 on a purchase price of $26,900.
There is an amazing opportunity right now to purchase properties around the country. The difficult part is there are so many moving pieces including:
- Sourcing product: finding good product
- Due diligence: back taxes, liens, code violations, rehab costs, demographics
- Transaction coordination: escrow, title, buyers, sellers
- Rehab: estimation, material handling, locating contractors, quality control, permits, city meetings
- Maintenance: lawn service, maintenance, code violations
- Leasing/marketing: advertising, signage, showings, underwriting, collecting stips, signings, packaging
- Management/loan servicing: Collections
While nobody has a magic bullet I am proud to be apart of this company. We are blessed to have a good sized group of around 75 folks that passionately believe in the vision of SEG and work to execute our systems on a daily basis to mitigate head aches and increase our clients success. If you Google Stone Equity Group you will see multiple client case studies that have purchased between 2 - 16 properties with our company.
I hope I answered your question. Thanks, - jph
I am writing as a legitimate customer of Stone Equity Group who is not happy with the services they provide. I was intrigued by their offer and weighed the down side and went for it. I purchased a home in Kansas City MO in March. At this time, it has a buyer living in it who has defaulted (I did not get the payment yet this month). The company that they want you to go through to service the loan is very expensive for their services. I have spoken to numerous insurance companies who will not insure the home, and I can’t get a call back, or a return email from anyone at SEG. This has been a 4 month nightmare for me. :banghead I would definitely NOT recommend this company to anyone. I could go on and on, but really I have better things to do. I don’t look at this site very often, so if anyone, including Josh, who I have seen post on here a few times, wants to get anymore information let me know
Joshua Host
Do you care to comment on this. Did you guys pull one over on this woman?
Based on the short bit of research I was able to find on SEG, there does not seem to be a huge amount of complaints out there.
The LA county BBB gives them an A- with only one customer complaint that has been resolved.
http://www.la.bbb.org/BusinessReport.aspx?CompanyID=100037042
Here is another link to a BBB site that has a couple of positive reviews.
http://www.trustlink.org/BusinessProfile.aspx?ID=205956991
With that being said I know these reviews could have been posted by the company themselves. I did find it interesting that there were no serious complaints out there.
To be honest the only solid complaint I was able to find was the one that was just posted by Nicky Foust. As we all know it is impossible to make everyone happy all the time so perhaps this is an isolated incident. However with that being said I am interested in hearing Mr. Host’s response to Nicky’s complaint.
Nicky,
Is this a true complaint against the company or was it just a way for you to throw out your REI website address in a post here? If you have your own website with information for home sellers/buyers, why were you dealing with the SEG anyway???
Good eye Justin. I missed that.
As a final note, in trying to actually make some progress with SEG I contacted the BBB to help me address the issues, because it is not productive to just whine in these types of forums. (which I’m obviously not very savvy at since I posted my EMAIL address so that actual interested people could contact me for details and it then got deleted by a moderator. My sincere apologies for my faux paux justin0419, and just to answer your question, I was working with SEG because even as an active real estate investor I keep my mind, and my options open to ALL possibilities. You might try it sometime.) To the credit of the company in answer to my BBB complaint I did receive a call from Mr. Host who I am working with to iron out the specific issues I have had. He seems sincerely confused by the unresponsiveness of his team and is putting in the effort to remedy the errors. This says a lot for the company. In retrospect, to honestly answer the original posted question. I think that you might consider SEG as an investment option if you are the kind of person who wants to park their money in a mutual fund and pay no attention whatsoever to what it is doing or the details of the situation. If it works out as they plan you give them $25K ish and in 10 years it turns in to $60K ish. My plans generally include turning that kind of profit in much less than 10 years, but I guess that is because I am paying attention. Not being an investing lemming, maybe this wasn’t the best investment for me, but it has been a learning opportunity. My final recommendation would be to think about what your goals are with your money and if turning over control of that chunk of money for the next decade, for the return they envision is a comfortable and profitable thing for you then go for it. Happy investing!
So I didn’t find this thread until after I had already thrown $23,900 in the dumper. I have no real estate investing experience and was contacted by SEG after I had put my phone number on a foreclosure inquiry website. I was looking to purchase the foreclosed home in my subdivision, but after listening to the SEG rep talk my ear off, this sounded like an easier and legitimate way to make a profit. I fell hook, line and sinker for the BBB rating and customer testimonials. I closed on a crappy home on May 20th and have yet to get any response from SEG regarding them following through on their promises of getting an end buyer in the home ASAP. Also, about a week after closing, I found the same house I supposedly own for sale on another real estate agents website for $7500. Yeah, good deal, huh. I have some more research to do to see if I have a leg to stand on with trying to get at least some of my “investment” back. Don’t touch this company with a 10 foot pole. It’s looking to be a complete waste of almost $24,000 and to tell the truth, I’m not even sure I actually own the home because 3 months later, SEG is still on the county tax records as the owner. It’s a pile of crap and I really wish I had learned a cheaper lesson.
Buy it for $7500 with the realtor and then file a suit to get your money back from SEG. Or contact someone at SEG and speak up. Call all the numbers you can find and leave messages every day until you get in touch with someone. Your money cant just disappear.
I am on the hunt for a lawyer I can afford. If anyone knows a good one in the Savannah, GA area, please chime in. I should’ve known better.
Don’t look for a lawyer that you can afford, lawyers are free. They take money from the settlement winnings. You pay nothing if you lose, and if you win they take 1/3. Don’t sue for the $24,000 you are out, sue for $100,000. Go to the biggest fanciest law firm in town, they will take the case. They may pass it to a junior associate but he will be the lawyer that graduated first in his class and really bright and energetic (they only hire the best). If he runs into a problem he will walk down the hall and ask a more senior lawyer. Because this is the best law firm in town, he will be asking the number one lawyer on the subject. So you get the benefit of the best although your lawyer may be young. That being said using the biggest and best law firm in town you will win and you will get paid back.
There are 3 things that will happen when you call that law firm. Number one they will determine that you can’t win, or can’t collect. If that is the case they will not tell you that you can’t win or collect they will just offer to represent you and ask for a retainer fee. If they do that you should leave. Number 2 they will decide that they can’t win or can’t collect and they will decline the take the case. In that case you should leave. Number 3 they will decide that they can win and can collect and they will take the case on contingency.
I will PM you the name of Savannah attorney.
My problem with the deal is the closing procedures.
When they came to the seminar, they wanted you to put down $1000 as good faith payment. And, they said “when they show you the property in paper, you pay and buy”. After I paid the $1000, they now wanted me to pay the whole $25,900 before seeing any proposal. Well, no problem, since the money is only going to an escrow account. But, then, you can only wire the money to an account, not even knowing the name of the account holder. The escrow company is Coast to Coast Abstract and Title, which does not even has a physical address. And, it is not a corporation. If you want to send a check, (No personal check, just cashier check) the address is a residential one. After I goggled the address, the place looks pretty bad. So, SEG came to show you the deal in a seminar. You ends up contracting to buy property from someone you do not know with a name of SEG Commercial LLC. And the contract asks you to send money to Closeline Settlement, the escrow holder. But, the wire instruction asks you to send money to Coast to Coast Abstract & Title.
If everything works out, I think you will get your property sooner or later.
But, if some how your money is misplaced, who do you go ask for help? Which party is legally responsible for any problem?
The lady who deals with us like to say this…“If you want this or that, you are not going to buy any property.” It is their way or no way. Well, I am the buyer, the consumer, the one who has the money to buy in today’s economy. They only hold on to one thing, our hope to make a lot of money with their deals. They need our money to buy the properties before they can sell them to us. Should we at least pick a mutually agreed escrow holder to keep our money before I even see the property.
They dictate the escrow holder. I do not think it is fair.
I’d like to see Joshua comment on these customer issues!
tctcpacma,
I would not spend your money on ANYTHING without completely understanding the process and actually seeing the house you are buying. You need to do WHATEVER IT TAKES to make sure that all deals are legitimate, not only deals from this company, but for ANY deal from ANY seller you might consider. If you have ANY question about the legitimacy of a deal; a seller; an escrow company; or anything else - DON’T RISK YOUR MONEY UNTIL THE ISSUES ARE CLEARED UP TO YOUR SATISFACTION!
Mike
Evening,
I just received this updated thread last night and wanted to respond. First to Nicky who posted the initial issue, I don’t understand the complaint as we sold her property on land contract within a month of her close of escrow for the terms that were initially offered. The buyer then moved in the first of the next month. The buyer “Phillipia” has not defaulted, rather Nicky sent her a letter stating she was supposed to send her payments to a different loan servicing company but had no contact info for her to call and verify it was correct so she continued to send her payments to the loan servicing company. This is a great house and is producing $450 net cash flow on a $23,900 purchase. That is a 22.5% ROI.
I wish I could say that I had similar news on Lori Hemmie’s property. The fact is we dropped the communication ball. Her rep is no longer with the company and it was never properly assigned to a new rep. I spoke with Lori personally today and here were the issues:
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She has yet to receive the deed from the county
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She does not currently have insurance on the property and does not have the information to give her insurance company for a policy.
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She has not had consistent communication with our company
Resolution:
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It can 1-6 months to receive arecorded deed depending on the county, and sometimes they send the deed to the title company. We have contacted to county and title company and working to track down the recorded deed.
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In early June we started sending out insurance quotes to clients before they closed. Before this point we figured clients were getting them on their own. We have requested an insurance quote from AMIG and should have by Monday for Lori.
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I have given Lori my personal cell phone number and assigned Lori’s account to a manager at our company to insure consistent updates.
Sometimes we drop the ball, but we are dedicated to getting Lori back on track. I had a great phone call with her and hopefully Tuesday after we are caught up she can update her post with the results.
Hopefully this sheds some light, jph
Oh yeah,
One more side note. As far as the post on the $1000 deposit; This starts the process and is fully refundable. We never have kept anyone’s $1000 that has canceled.
Thanks, jph
Many new investors are trying too hard to recover massive equity losses in their home and their 401k. I have seen similar Real Estate programs offering very high rates of return.
It is very much in the best interests of investors to do all the due diligence they can before investing with any sponsor. Not having enough references from happy customers is a red flag. Projecting returns based on 100% occupancy is a red flag. Not being able to see the property before a purchase is a red flag.
Buyer beware is not just a saying…